Amazon, Bracing for Strikes in Germany, Plans to Hire Engineers

BERLIN — Amazon, the world’s biggest online retailer, said Thursday that it planned to hire 70 software developers at a new cloud-computing center in Germany as it tried to consolidate its position in the growing field.

Werner Vogels, the chief technology officer at Amazon, said the company chose Germany because it was the largest market in Europe and because Berlin was a good source of qualified software engineers and application developers.

Mr. Vogels said Amazon’s sales of cloud-computing were accelerating in Europe, as technology managers sought to cut costs and were increasingly reassured that sensitive corporate data could stay secure in remote data centers.

“All I can say is we are very happy with the development of cloud-computing sales in Europe,” Mr. Vogels said during an interview at the cloud-computing conference in Berlin, which was attended by 935 software developers.

At the same time, the U.S. tech giant is girding for possible strikes by workers at two of its largest distribution centers in Europe.

Amazon employees in Bad Hersfeld who belong to ver.di, a German trade union, voted Monday to authorize a strike. Mechthild Middeke, a ver.di spokeswoman organizing workers at the Bad Hersfeld plant, said 97.6 percent of ver.di workers at the facility had voted to strike.

The employees want Amazon to sign a collective bargaining agreement used by some local employers, which ver.di says could increase the annual pay and benefits of Amazon workers as much as a third. Amazon has refused to sign the agreement, arguing that the U.S. company pays workers at levels comparable to other local online retailers, Ms. Middeke said.

Ver.di wants Amazon to pay the roughly 9,000 workers at its eight logistics centers in the country as “retailing” workers under German law, which would qualify them for the higher pay. Amazon says the workers are “logistics” employees, who on average earn €9.30, or $12.10, an hour in their first year of service and more than €10 an hour thereafter.

“We will do everything possible should there be strikes to make sure that our customers in Germany are served,” said Christine Höger, a spokeswoman for Amazon Germany in Munich. Ms. Höger said that Amazon paid its logistics employees more than comparable German businesses pay for logistics workers.

Ver.di members at Amazon’s distribution center in Leipzig voted last month to strike. Dates for the strikes have not been set, Ms. Middeke, the union representative, said. She declined to say if her union represented a majority of workers at either Amazon facility.

“A work stoppage will take place in the near future,” Ms. Middeke said.

Ms. Höger said Amazon had attempted to reach agreement with ver.di representatives, but had made little progress.

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“We had several informal talks with ver.di over the past few weeks,” Ms. Höger said during an interview. “While we are willing to continue our conversation, we also see too little common ground for negotiations at the moment.”

Heribert Jöris, the managing director of Handelsverband Deutschland, the main association representing employers in the German retailing industry, said he estimated the chances of a strike at Amazon’s facilities as “very high.”

The employers’ association in January canceled a nationwide collective bargaining agreement covering workers at 100,000 retailing businesses, saying it wanted changes in compensation and work practices that date from the 1950s.

Employers and unions are expecting to begin negotiations on a new contract within weeks. Ver.di this year organized a strike by workers at Zara, the clothing retailer, and has threatened work stoppages at Globus, a discount chain, Mr. Jöris said. But in neither case have employers agreed to new wage pacts, he added.

“I’m pretty sure there will be strikes now,” Mr. Jöris said. “But that doesn’t mean the strikes will be successful.”

Mr. Vogels, a Dutchman who is based in Seattle, declined to comment on the labor situation at Amazon’s retailing operations in Germany.

The new engineers would be hired by a division of Amazon, Amazon Web Services, over the next 12 months. The developers would work for a new subsidiary, Amazon Development Center Germany, which would make applications and other software tools for customers of Amazon’s cloud-computing business.

Amazon offers its European business customers like Royal Dutch Shell; Kempinski Hotels, a chain based in Geneva; and Unilever the option of storing their data in computing centers that it runs inside the European Union to satisfy a law that requires business to handle the data of E.U. citizens within the 27-nation bloc.

Jeremy Ward, a senior vice president for information technology at the Kempinski chain, which is majority owned by the sovereign wealth fund of Thailand, is in the middle of a five-year project to shift its corporate computer functions to Amazon’s cloud.

Mr. Ward said Kempinski was on track to cut its annual I.T. costs by 40 percent as it moved functions like an internal employee telephone directory, training videos and corporate news, currently run by 143 Kempinski servers, into the cloud.